Global employment is projected to expand by only 1% in 2023, which is a significant deceleration from the 2.3% growth rate of 2022 owing to the Russia-Ukraine war, soaring inflation, and tightening of monetary policy, according to a report by the Geneva-based International Labour Organisation (ILO). The ILO has projected global employment to grow by 1.1% in 2024. The report comes amidst mass layoffs by several big-tech companies and startups globally.
Titled 'World Employment and Social Outlook 2023,' the report says, "The outlook is pessimistic for high-income countries, with close to zero employment growth. By contrast, low-income and lower-middle-income countries are projected to see employment growth surpassing their pre-pandemic growth trend."
According to the report, strong employment growth in 2022 raised the global employment-to-population ratio to 56.4% up from 54.5% in 2020, however, was still almost half a percentage point below the level of 2019. A slowdown in employment growth in 2023, would further mean that gaps opened up by the Covid-19 crisis, globally, are not projected to be closed in the next two years.
Amidst a global economic slowdown, the average weekly hours per worker are projected to decline and continue to remain at just above 41 hours per week in 2023. In 2022, the total weekly hours worked remained shy of their level in the fourth quarter of 2019 by 1.4% when adjusted for population growth; this figure translates into the equivalent of 41 million full-time jobs (at 48 hours per week).
"This reduction in activity limits the earnings potential of workers and in all likelihood lessens opportunities for transitions into better-quality, well-paying jobs," the report says.
Meanwhile, global unemployment is projected to edge up by around three million in 2023, to reach 208 million, which corresponds to an unemployment rate of 5.8%. The global unemployment stood at 205 million in 2022. "Despite the negative global economic outlook, global unemployment is projected to increase only moderately, since a large part of the shock is being absorbed by rapidly falling real wages in an environment of accelerating inflation," the report says.
According to the report, amidst the global economic and employment growth slowdown, more workers will be forced to accept lower quality and poorly paid jobs, and will experience rapidly declining disposable incomes even when they can keep their current jobs. "The current slowdown means that many workers will have to accept lower quality jobs, often at very low pay, sometimes with insufficient hours," the report warns.
The global employment slowdown will also have a significant impact in widening the already existing gender gap. In 2022, the unemployment rate amongst women stood at 5.8% which is 0.1 percentage points above that of men. Moreover, the jobs gap rate globally stood at 12.3% in 2022, which was well above the global unemployment rate of 5.8%. However, this job gap was particularly large for women, as per the report. The female jobs gap rate stood at 15%, whereas the male jobs gap rate stood at 10.5% in 2022.
"Personal and family responsibilities, including unpaid care work, can prevent many people from seeking employment or limit their availability to work at short notice. Such limiting factors disproportionately affect women and thus explain the large gap in this broader measure of labor underutilization," the report says.
Apart from this, the ongoing impact of the Covid-19, cost-of-living and geopolitical crises are also “eroding” the purchasing power of household disposable income and reducing aggregate demand, according to the report. The report says that in the absence of the proper policy coordination, the world will always have a risk of the dominant economies pursuing a policy agenda that primarily caters "to their domestic challenges without due regard for the potential collateral impacts."
